Strategy Inc. Rallies 23% on TD Cowen’s $440 Target, $2.25B Cash Shield
Strategy Inc. shares surged 22.9% after TD Cowen reiterated its $440 price target, citing a $2.25 billion cash reserve capable of covering $900 million in fixed charges for 17 months and staving off any forced Bitcoin sales. The firm’s $7 billion preferred equity “digital credit engine” offers an 11.25% dividend, bolstering liquidity amid a 61% Bitcoin slump.
1. Cowen Bull Thesis
TD Cowen analysts maintain that Strategy Inc. is positioned to weather Bitcoin’s downturn, arguing there is no scenario requiring sales of its crypto holdings. The firm’s shares are engineered to be 1.5× Bitcoin volatility, amplifying gains on rallies and losses on drops.
2. Solvency and Capital Structure
Strategy holds $2.25 billion in cash, sufficient to fund $900 million of fixed charges for about 17 months and cover $1 billion of convertible notes putable in 2027 without resorting to asset sales. Management notes Bitcoin would need to trade below $8,000 for five years to strain convertible debt servicing.
3. Digital Credit Engine
In fiscal 2025, Strategy raised over $7 billion of preferred equity—33% of all US preferred stock issuances—through its STRC series, offering an 11.25% annual dividend and daily liquidity above $118 million as an alternative to debt financings.
4. Technical Outlook
After testing support at $100–$110, the stock bounced toward resistance at $155, then $165–$175, while an RSI near 36 indicates oversold conditions. The descending channel and a SAR at $155.29 suggest the bearish trend remains intact unless a breakout occurs.